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Insurance in ‘Jeopardy’? What does Watson think?

Jamie Bisker, who has spoken several times to Insurance-Canada conferences (most recently in 2010), is putting forward some compelling thoughts on how natural-language question and answer (QA) systems – such as the IBM Watson system – which recently successfully competed on Jeopardy – could ‘change the insurance landscape’.

Bisker, who serves as the global segment manager, non-life, for the IBM global team, wrote an article in the February 21, 2011 on-line edition of PropertyCasualty360 entitled Virtual Viewpoint:  Watson and Insurance Technology.  In it, Bisker argues that as good as current systems are in storing and accessing a wide range of information, the range and the value of the information is limited because the data, and the queries to retrieve the data must be structured.

The technology behind IBM’s  Watson changes the paradigm from structured to unstructured, allowing users to frame questions in a natural language to be posed against data stored as unstructured text.  As an example of how this could be used, Bisker points to regulatory and legal compliance:  “A QA system could be loaded with the text and figures of regulations across geographic boundaries. In the U.S., that would be various states. For carriers that are more globally oriented, their coverages may cross national boundaries as well.”

If a an insurance executive needed to understand the impact of existing or proposed regulations on products or pricing decisions, the executive could use the QA system to “ask the questions that will prioritize where she directs her team to focus their efforts. This may be especially useful and efficient as more ‘principles-based’ insurance regulations are enacted around the world.”

Sound Star-Warsie?  It is, right now, but technology is changing rapidly.  Consider that vast quantities of unstructured data are now stored and there are already methods  to ask rudimentary, limited natural-language questions (think Google).  As technology progresses, along the lines of Watson, Bisker suggests that the insurance industry keep and open mind about the possibilities.

We think that’s good advice.  In the meantime, we also suggest that we think carefully about the questions we have not been able to ask our data,  because the answers will be only as good as the questions we ask.  Remember Proverbs for Paranoids #3:  “If they can get you asking the wrong questions, they don’t have to worry about answers.” (Thomas Pynchon, Gravity’s Rainbow, quoted from The Modern Word).

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